What a financial analyst does
The US occupation database says financial and investment analysts analyse investments or financial data. That includes valuing businesses.
Australia's occupation list says investment analysts collect and analyse information such as market trends and financial statements. The work includes:
- researching companies, shares, debt and managed funds
- building and maintaining financial models
- monitoring market and investment performance
- writing reports and recommendations for senior managers and investors
England's National Careers Service adds examining company accounts, and making sure work meets strict financial rules.
Skills employers look for
England's National Careers Service lists skills including:
- maths knowledge
- knowledge of economics and accounting
- analytical thinking
- using your judgement to make decisions
- using a computer and the main software packages confidently
Canada's Job Bank lists a degree in commerce, business, accounting, finance or economics as usual. It also says a designation such as the CFA is usually required there.
How the interviews usually work
You may meet a mix of these:
- Behavioural questions about analysis, deadlines and teamwork.
- Technical questions on the three financial statements, ratios and valuation.
- A case study or modelling task, such as building a simple model in a spreadsheet.
- A presentation of your findings to the panel.
Ask how long any task takes, which tools you can use, and whether you can bring a calculator.
Questions that test each skill
These are the kinds of questions that test each skill. They are examples, not a list from any one employer.
- Analysis: "Tell us about an analysis that changed a decision."
- Technical basics: "How do the income statement, balance sheet and cash flow statement link?"
- Modelling: "Walk us through a model you built. What were the key assumptions?"
- Judgement: "Your numbers point one way and your manager's view another. What do you do?"
- Communication: "Explain a complex result to someone without a finance background."
- Accuracy: "Tell us about a time you found an error in your own work."
What to prepare
- Revise the basics the ad names, such as statements, ratios, forecasting and valuation.
- Pick true stories about analysis, an error you caught and a tight deadline.
- Practise a timed spreadsheet task, then explain your result in two minutes.
- Read the employer's latest annual report or results, and note two things to ask about.
- Form a short view on one trend that affects their market.
Be exact about qualifications. If you've passed one level of an exam, say that. Don't imply you hold the full designation.
A worked answer for an analyst role
Here is a made-up answer to a question that tests analysis.
Made-up example
Daniel, a made-up graduate applying for a financial analyst job
Question
Situation
Task
Action
- I pulled 2 years of sales, cost and freight data for the line from our finance system.
- I split costs by product, including shared costs that the usual reports left out.
- I built a simple model showing profit per unit under three price and volume cases.
- I checked my numbers with the factory accountant before sharing them.
- I wrote a one-page summary with one chart, and put the key assumption in bold.
Result
Daniel shows a clean method: data, checks, a model, then a clear summary. He names his key assumption, so others can test it.
Questions
Do I need a CFA to apply?
It depends on the job and the country. Canada's Job Bank says the CFA or a similar designation is usually required there. Check the ad.
Will there be a modelling test?
Some employers set one. Ask what the task involves, how long it takes and which tools you can use.
How technical will the questions be?
Read the ad. If it names models, valuation or a tool, expect questions on each.
Sources
Written by Seal the Offer from these pages, last checked on . Rules change, so check the employer's own page and the job ad before you apply.